Thursday, June 28, 2007

Making Rain: Davis and Devolites at ICG Government

The Post today has a front page story continuing the series by Robert O'Harrow: Costs Skyrocket As DHS Runs Up No-Bid Contracts: $2 Million Security Project Balloons to $124 Million.

What were Mr. and Mrs Tom Davis doing during this alarming cost run-up? Instead of letting GSA and the House Government Reform Committee do their jobs overseeing the contract, Davis was speaking before the same contractors at his wife's company, ICG Government, telling them how to get the most taxpayer money in Homeland Security contracting. This photograph of his speech was prominently displayed on the front page of the ICG website, along with the photo of the head of Homeland Security (DHS). The front page at ICG also linked to his wife's bio, the only ICG bio that names a spouse. Davis also was presiding over running out Angela Styles from GSA, who had been demanding audits and accountability for the overruns. Finally, he continues to defend Lurita Doan at GSA who eliminated auditors there. The Department of Homeland Security officials were so distraught with the forced contracts that the DHS hired its own auditor to report on the matter.

Here's the startling highlight from today's story:

The project started in 2003 with a $2 million contract to help the new Department of Homeland Security quickly get an intelligence operation up and running.Over the next year, the cost of the no-bid arrangement with consultant Booz Allen Hamilton soared by millions of dollars per month, as the firm provided analysts, administrators and other contract employees to the department's Information Analysis and Infrastructure Protection offices.

By December 2004, payments to Booz Allen had exceeded $30 million -- 15 times the contract's original value. When department lawyers examined the deal, they found it was "grossly beyond the scope" of the original contract, and they said the arrangement violated government procurement rules. The lawyers advised the department to immediately stop making payments through the contract and allow other companies to compete for the work.

But the competition did not take place for more than a year. During that time, the payments to Booz Allen more than doubled again under a second no-bid arrangement, to $73 million, according to internal documents, e-mail and interviews.

In addition to his front page appearance at ICG helping his wife land these bidders as paying clients, Davis was also pushing for laws that reduced contract oversight.

Under the 2003 Services Acquisition Reform Act (H.R. 1837), sponsored by Rep. Tom Davis, R-Va., some contractors providing widely available commercial services would receive exemptions from cost accounting standards on sole source agreements worth up to $15 million. The bill also encourages government agencies to enter into share-in-savings agreements, where they would share the windfall generated from new innovations with contractors.

Davis's contacts with Beltway Bandits goes back to his rise to power and lead of the Republican National Congressional Committee.

Three of [VA Senator John] Warner’s top ten contributors for 2001 through 2006 were missile defense contractors Northrop Grumman, Lockheed Martin and Boeing. TRW (now owned by Northrop Grumman) threw a luncheon honoring Sen. Warner and Rep. Tom Davis during the 2000 Republican convention in Philadelphia, at a time when the company was under investigation for possibly falsifying data in its missile defense testing program.

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